Monday, December 22, 2008

The Results of CAFTA...

Here is one of the first stories I have seen about the use of CAFTA (the Central America Free Trade Agreement) by a corporation to bully a signatory nation into changing it's laws or cough up millions of dollars in damages. We have seen this repeatedly with NAFTA. These investor-to-state rights provisions of these trade agreements are incredibly anti-democratic and one of the most dangerous elements of these agreements. This is from a CISPES update...

On December 9, 2008, Canadian-based Pacific Rim Mining Corp. filed a Notice of Intent (NOI) to begin arbitration proceedings against the government of El Salvador . The NOI was filed under Central America-Dominican Republic-United States of America Free Trade Agreement (CAFTA-DR) laws, and serves as the first step in opening up legal proceedings against El Salvador (Canada is not a member of CAFTA but the arbitration would be filed under its US-based subsidiary, Pac Rim Cayman.) The company and country will have 90 days to amicably resolve their dispute. If no resolution is reached by March 9, 2009 – just six days before the Salvadoran presidential election — Pacific Rim can then open arbitration proceedings under the Convention on the Settlement of Investment Disputes Between States and Nationals of Other States and under the Rules of Procedure for Arbitration Proceedings of the International Centre for Settlement of Investment Disputes (ICSID)—an affiliate of the World Bank.

Pacific Rim maintains that it has invested over $75 million dollars in the El Dorado mining project and that there is potential for huge returns and the creation of new jobs. The company claims that, despite its compliance with all laws, the government of El Salvador has failed to grant the permits to begin to exploit the gold and silver mine. An eventual lawsuit is expected to demand several hundred million dollars in damages from El Salvador , an amount that would further damage a country that is already in a dire economic situation, in part due to the effects of the CAFTA-DR accord.

Citizens' organizations in El Salvador have come out very strongly against mining, and specifically against the El Dorado project. Environmentalists contend that the project would lead to acid drainage, water pollution, and the evaporation of cyanide, thus devastating the environment and public health. The “I Reject Metal Mining” campaign is a combined effort of a broad spectrum of environmental, labor rights, and community organizations that has held many demonstrations and educational events throughout the country. Some political analysts have suggested that the timing of the NOI, putting the end of the 90-day grace period just days before the presidential elections, opens the possibility that the governing Nationalist Republican Alliance (ARENA) party could claim that a victory by the leftist Farabundo Martí National Liberation Front (FMLN) party would open El Salvador to losing the several hundred million dollar lawsuit.

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